February 27, 2005

Mandatory Insurance vs. Taxes

The phobia of conservatives against taxes is often bizarre, since they'll impose the equivalent on the population, but do anything to label it a fee, a fine, or, ahem, mandatory health insurance, a solution to the health care crisis in the view of conservative judge Richard Posner. He argues that forcing people to pay for health insurance is a better alternative than "socialized medicine," but, really, what's the difference?

Posner even supports government subsidies to pay for the health care of the poor, so you have a system where some people pay a large percentage of their income to pay for government-mandated payments for health care and others pay very little. Seems to quack like a tax to me.

Of course, mandatory private insurance enriches the stockholders of the insurance companies, but that's a spending question; god knows, we see taxes raised all the time being used to enrich the stockholders of government contractors. Posner claims this difference between taxes and mandatory insurance is significant in a later post, but he does little to clarify why. For the average taxpayer/insurance payer, it's still money out of pocket by government order.

Posner is correct that a big problem with health care is that young, healthy people can avoid paying anything at points, especially if they have few assets to risk, so the obvious answer is just to pay for it directly with taxes-- the simplest mandatory insurance system possible without any of the collection problems Brad Plumer is worried about.